Panama Canal work not likely to be halted Monday

In this Jan. 11, 2014 photo, cranes tower over the construction site of the Panama Canal's Atlantic side in Gatun, north of Panama City. The Spanish-led consortium hired to handle the biggest part of the canal expansion says it will halt work by Monday, Jan. 20 if the canal authority doesn’t come u

The Associated Press

In this Jan. 11, 2014 photo, cranes tower over the construction site of the Panama Canal's Atlantic side in Gatun, north of Panama City. The Spanish-led consortium hired to handle the biggest part of the canal expansion says it will halt work by Monday, Jan. 20 if the canal authority doesn’t come up with the funds to cover cost overruns, while the authority insists the consortium live up to the terms of the original contract. (AP Photo/Arnulfo Franco)

In this Jan. 11, 2014 photo, cranes tower over the construction site of the Panama Canal's Atlantic side in Gatun, north of Panama City. The Spanish-led consortium hired to handle the biggest part of the canal expansion says it will halt work by Monday, Jan. 20 if the canal authority doesn’t come up with the funds to cover cost overruns, while the authority insists the consortium live up to the terms of the original contract. (AP Photo/Arnulfo Franco) (The Associated Press)

JUAN ZAMORANO Associated Press

PANAMA CITY (AP) — The Spanish-led consortium handling the biggest part of the Panama Canal expansion said Sunday it does not foresee halting work Monday, although it warned that remains an option if there is no resolution to a financial dispute.

The canal-building group known as United for the Canal said in a brief statement that a stoppage "is not a scenario being considered at this moment." But it said the group is entitled to suspend work any time after Monday.

The group had given Panamanian Canal authorities a Sunday deadline to come up with the funds to cover $1.6 billion in cost overruns. The authority insisted the consortium live up to the terms of the original contract.

No agreement had been reached as of Sunday.

Late Sunday, the Panama Canal Authority issued a statement saying the contract allows the consortium to stop work only if the agreed monthly payments by the authority are not disbursed, which has not happened.

It said informal negotiations had been conducted over the weekend with Spain's Sacyr Vallehermoso, the company that heads the consortium, but didn't say if there was any advancement.

"We will analyze all the proposals formally presented as long as they are within what was agreed in the contract," the authority said.

Canal Administrator Jorge Quijano said previously that work on the expansion had declined by 70 percent since November and that hundreds of workers were let go because of the slow pace of the megaproject.

The project, now three-fourths of the way complete, would double the capacity of the 50-mile (80-kilometer) canal, which carries between 5 percent and 6 percent of world commerce.

The consortium blames the cost overruns largely on problems with the studies carried out by the Panamanian authority before work began. It says geological obstacles encountered while excavating have prevented it from getting the basalt needed to make the massive amounts of concrete required for the expansion.